In a resounding victory that has reshaped the American political landscape, the Republican Party has secured a majority in the U.S. House of Representatives, capping off a trifecta of wins in the 2024 elections. With the re-election of Donald Trump to the presidency and key Senate seat flips, the GOP now holds the reins of power in both chambers of Congress and the White House, paving the way for a potential surge of crypto-friendly legislation.
The House Flips Red
As the final votes were tallied, it became clear that the Republicans had defied expectations and clinched the 218 seats needed for a majority in the House. The Associated Press called the race on Wednesday evening, projecting that the party could hold up to 222 seats when all is said and done. This outcome flies in the face of pre-election forecasts, which had predicted Democrats to flip the chamber.
The House has been the epicenter of crypto legislation at the federal level, particularly over the past year as several bills focusing on digital assets sailed through the 435-member body. Republicans held a slim majority during that period, but the conventional wisdom held that Democrats would turn the tables in 2024. Instead, the GOP has not only held the line but expanded its control.
Trump Taps Crypto Allies for Executive Branch
The Republican victory in the House is all the more significant given that the party will lose several key legislators to roles in the executive branch. President Trump has nominated Representatives Matt Gaetz, Elise Stefanik, and Mike Waltz for top administration posts, which will necessitate their resignation from Congress. Gaetz, Trump’s pick for Attorney General, has already tendered his resignation “effective immediately.”
“The crypto community should be very encouraged by these developments. With Republicans in control of both the legislative and executive branches, we have a real opportunity to establish a comprehensive regulatory framework that will allow this innovative industry to flourish.”
– Prominent crypto lobbyist who requested anonymity
Pro-Crypto PACs Notch Wins
The super PAC Fairshake and its affiliated PACs, Protect Progress and Defend American Jobs, provided financial backing to roughly 60 House and Senate candidates in the 2024 elections, the vast majority of whom emerged victorious. During the primaries, Fairshake largely supported candidates in safe districts, ensuring that their chosen standard-bearers would coast to victory in the general election.
Among the handful of races where their candidates fell short were seats in Colorado, where a Republican defeated Democrat Yadira Caraveo, and in California, where a Democrat bested Republican Mike Garcia. At press time, Fairshake candidates were trailing in at least two other contests, but the PACs scored over 50 wins, perhaps most notably in the Ohio Senate race. Senator Sherrod Brown lost to Republican challenger Bernie Moreno, a car dealer and entrepreneur who benefited from $40 million in Fairshake support.
What’s Next for Crypto Legislation?
Retired Rep. Patrick McHenry (R-N.C.), who chaired the House Financial Services Committee, spearheaded the passage of the Financial Innovation and Technologies for the 21st Century Act (FIT21), a market structure bill that would have defined how various types of crypto should be regulated by U.S. agencies. The House also passed a rollback of the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin 121, a controversial policy dictating how financial institutions must report digital assets they hold for customers.
The SAB 121 resolution was approved by the Senate but subsequently vetoed by President Joe Biden. The FIT21 bill did not receive a Senate vote. With Republicans now firmly in the driver’s seat, the fate of these and other crypto-related measures hangs in the balance.
California Democrat Maxine Waters remains the ranking member of the Financial Services Committee, while Republicans have yet to select who will lead their caucus on the panel. Representatives Andy Barr (R-Ky.), Frank Lucas (R-Okla.), French Hill (R-Ark.), and Bill Huizenga (R-Mich.) are among the lawmakers vying for that role.
Waters worked with outgoing committee chair Patrick McHenry on stablecoin legislation in recent years. It remains to be seen whether that bill will be reintroduced during the lame-duck session later this year or if it will resurface next year when the new Congress takes power. Regardless, the Republican trifecta has primed the pump for a potential wave of crypto-friendly policymaking – and the industry is watching with bated breath.
